As a Realtor, it’s not uncommon to hear a price objection from a Buyer when visiting homes. “It’s too expensive,” “out of my price range” and “more than I’m looking to spend” are some of the most common objections a Realtor can hear about a particular house when working with Buyers.
So what exactly does that mean? How is a Realtor supposed to respond? What would you say?
- “I understand, we can look at some more affordable homes for sale nearby.”
- “Well, you’re actually qualified to borrow up to this amount. It’s only going to be an extra couple hundred dollars a month when it comes down to it.”
- “Too expensive? No way! This house is a great buy for what the Seller is asking.”
All three things above sound either too passive or too confrontational. None of them seem like they would make the Buyer happy which is the ultimate goal. So what would you say instead?
Grant Cardone, international sales coach and author of Sell or Be Sold, says that when a customer says, “It’s too expensive” they are actually saying, “This is too much money for the particular solution you’re offering me.”
Grant is basically saying that the customer doesn’t have a problem with spending $500k for a home, he just has a problem spending $500k for that home.
“I’ve had thousands of customers tell me that it’s either too much money or that it’s over the budget, or they get that uncomfortable money look on their face during the close. I’ll immediately move that buyer up to a more expensive product,” Grant explains. “Why? Because they’re telling me that it’s too much money for that product or service or that they’re not sure it will resolve their problem. The buyer would rather pay more and make the right decision than pay less and make a mistake.”
In other words, Grant is suggesting that if a buyer objects to the price of a home, we immediately show that buyer a more expensive home. Does that idea seem completely absurd to you?
“The same buyers who use price as an objection will often go out and spend even more money, not less!” he says.
Come to think about it, he might be right. Grant explains, “Consider how many times you’ve paid more than you could afford and you loved it! Consider how many times in your life you went over budget because you found something that you weren’t even looking for and decided to buy it on impulse. Remember, it’s almost never about price. “
Ultimately we, as Realtors, want our clients to be happy with one of the biggest investments they’ll ever make. And if they’re not happy, who are they going to blame? YOU!
So if not for our clients’ sake, we need to make them happy for our own livelihood! Happy clients lead to referrals, which lead to more money in our pockets. With Grant Cardone’s line of thinking, it’s almost as if we’re doing our clients an injustice by NOT following this philosophy and showing them a more expensive home. If you’re wrong, it’s not difficult to backtrack and do what you would have done before anyway. “Well let’s go look at some more affordable homes nearby.”
If your immediate thought after reading this article is, “You’re wrong. That wouldn’t work on my clients because…” Well you’re probably right! That reason you just thought of is probably a legitimate reason why this philosophy would NOT work. Nothing works 100% of the time. Even I take breaks and days off! The best thing you can do from this article is consider it next time the situation inevitably comes up.
A more expensive home for us Realtors means a marginally higher commission. I’d be just as happy if a client bought a $500k home than a $550k home in terms of my commission. The truth is, we want our client’s to (1) Buy Something, and (2) Refer their friends. So if you think your client will be more likely to buy something if you move them down in price, consider the last time you bought a cell phone. I know you wanted that brand new 4G device that costs close to $400. You also got the extended battery, leather case, and car charger. Would you have been as happy if, when you objected to the high price of the phone, the salesperson had suggested a cheaper model?
“This one doesn’t connect to the Internet. I know you wanted to be able to check e-mail, but this phone’s cheaper.”
“That’s a cell phone. We’re talking about houses,” you might be thinking now. Skeptics always have more than one reason NOT to do anything. Believe me, I know.. I am one. Whether cell phones, boats, cars, televisions, insurance, a haircut, or a house, the process we use as consumers to identify whether or not we want to purchase is the same.
Grant Cardone explains, “Your prospect, regardless of what he says, always wants more, not less. Believe it or not, people love to spend money, and the more money they spend, the more they enjoy spending it and the more they will enjoy their decision. Show me one person who has ever come in under his or her budget when buying a home, car, furniture, equipment, clothes, a vacation—anything. That person doesn’t exist. Consumers want to take home lots of things, not just one thing. They want to brag to their friends and neighbors that they spend the most money and bought the most expensive thing. People love showing off. If they didn’t, there’d be no market for sports cars and designer clothing. “
Good luck everyone! Please share your thoughts in the comments section below.
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